The great Zig Ziglar said every sale has five basic obstacles. No need, no money, no hurry, no desire, and no trust. When I was a dedicated closer I pasted that quote on the wall in front of me and stared at it on every call. Like a Buddhist disciple.
Over time I turned it into my own negotiation acronym. DEBUT. Decision maker, Entrusted, Bank, Urgency, and Timing. Five parts. One framework that has taken close rates from two percent to over seventy percent in a matter of months.
This is part three. Bank.
If you missed part one on Timing, read it first. https://www.outsold.com.au/debut-part-1-time/ It will change how you think about deals that are not moving and why sometimes the most powerful thing you can do is agree to call someone back in two years.
If you missed part two on Urgency, read that next. https://www.outsold.com.au/debut-part-2-urgency/ It will change how you think about what a salesperson’s job actually is.
Why I Didn’t Use Budget
I deliberately did not use B for Budget in the DEBUT acronym. Budget is part of it. But budget alone misses the point.
Yes, departments have budgets. Yes, businesses have financial plans. Both of those matter enormously in a sale and we will get to them. But the reason I use Bank instead of Budget is that money in sales is almost never just money. The old saying ‘Bad sales people offer discounts.’ Is because a bad salesperson only sees one variable in a negotiation, the price. It shows that they have no understanding of negotiation at all.
My father taught me that sales is easy. It answers two questions. ‘This is what it costs. This is what you get.’ Simple. If you can answer those two questions clearly and confidently you are most of the way there. Everything else is just removing the obstacles between the buyer and their own decision.
But here is the complication. Even if you are talking same product, same currency, same market. What it costs, and what you get, means something completely different to different buyers.
If you do not understand what the cost represents, or what the benefit is to your specific buyer, then you should probably not be at the negotiation table yet, meaning your only variable is to discount.
Money Is Never Just Money
I have negotiated with buyers from dozens of cultures and commercial backgrounds over the years and nothing illustrated this more clearly than working with Chinese business prospects, partners and clients. They are very astute negotiators.
When negotiating with the Chinese, money is not the most important factor. It is the twenty-five most important factors.
What I mean is that money in Chinese business culture is simultaneously a representation of success, luck, happiness, status, and prestige. It is tied to relationships, to face, to the concept of guanxi, the intricate system of reciprocal favours and obligations that underpins how business actually gets done. The ability to negotiate well is itself a form of social approval. The final number is almost secondary to the dance that produced it. I have seen verbose negotiations that lasted hours and asked what the margin was? It was around five cents. The actual dollar amount was not important.
A Western salesperson who goes into that negotiation focused purely on price will get eaten alive or ignored, not because they offered the wrong number but because they completely misread what the conversation was actually about. A regular complaint is that Australian’s are too quick to arrive at yes or no and end a negotiation. There’s a million shades of grey that we ignore.
This is an extreme example but the principle applies everywhere. A founder negotiating the sale of a business they built over twenty years is not just negotiating a price. They are negotiating the acknowledgement of two decades of their life. A procurement manager at a large corporation negotiating a supplier contract is partly negotiating their own credibility with their board. A small business owner buying a service for the first time is partly negotiating their fear of making the wrong decision.
Money is the surface of the water. Know how deep the water runs.
What You Actually Need to Know About Bank
Know what your product is worth in relation to the market.
Before you sit down at any negotiation you need to know where you sit competitively. Not vaguely. Specifically. What do comparable products or services cost? What about adjacent or alternate products? Where are you priced relative to the market and why? If you are at a premium, what justifies it? If you are competitive on price, what are they missing out on? A salesperson who does not know the market they are selling into cannot hold a price under pressure because they have no reference point to anchor to. The modern buyer almost always knows the market. If you know it better than they do, you are in control. If they know it better than you, they are.
Know the margins you are negotiating in.
Every deal has a floor and ceiling. Know yours before the conversation starts. Know the lowest number you can accept and still make the engagement commercially viable, and know exactly what has to come out of scope to get there. The salesperson who starts discounting comes back to the office with a wet noodle contract an air of superiority, while the operations team groans at another bloated piece of work that is going to be a net loss. Once that contract is signed you have to deliver. I always say in construction that if you get a purchase order within 15 minutes of sending the proposal you know you just cost the company hundreds of thousands of dollars, because you missed something in the scope of works and their contract administrator picked it. Their quickly signing the contract means their whole project team gets a huge ‘under budget bonus’. That you’re paying for.
The price is the price, hold it high. The same staff that offer discounts aren’t going to offer you a discount on their wages. It’s easy to negotiate away other peoples money so that people will like you. A fundamental truth in life is ‘nice guys finish last’. A fundamental truth in sales is nice guys are terrible negotiations because they have too much empathetic understanding of the other party’s needs. Putting the other person is supreme in all parts of sales EXCEPT negotiation.
Know what parts of the contract are valued at.
This is where bad salespeople consistently destroy their own position. When a buyer asks for a lower price, the correct response is not to lower the price. It is to negotiate the scope. Every element of what you deliver has a value attached to it. If the buyer wants to pay less, something comes out. You name what comes out and you let them decide whether they want it that way.
Remember if you offer a discount they will keep expecting it. Discounting teaches the buyer that your prices are negotiable, that you had plenty of fat on the bone that they were overpaying. Which means every future conversation they will know you have margin to sacrifice. A really common mistake is to offer the first deal at ‘mates rates’ or reduce the price to win the first piece of work. Reducing scope maintains the integrity of your pricing and puts the decision back where it belongs, with the buyer.
There’s artful parts to this like ‘land and expand’, or winning a small piece of work to land bigger projects. An isolated initial project, must clearly be articulated as deliberately undervalued as ‘cost of sale’, but understand the difference to discounting.
Know what your product is worth to the customer.
This is different from what it costs and different from what the market charges. This is the specific value your solution creates for this specific buyer in their specific situation. A piece of software that saves a ten person business two hours a week is worth something. The same software saving a thousand person business two hours a week per employee is worth something dramatically different. Your price should reflect the value delivered, not just the cost of delivery. If you do not understand the value you are creating for this particular buyer you will almost always under-price, and the buyer will sense it. Negotiation is not about selling something to someone they don’t want, it is an intelligent discussion about if there is a middle ground that both company’s can work with.
One of the ten foundational principals of economics is that the price of something is what someone else will pay for it.
This is a deep and complex idea, you can read more here: https://www.outsold.com.au/dijon-mustard/
Find out their budget and plan to spend.
This sounds obvious and most salespeople never do it directly. Ask. What have you budgeted for solving this problem? What did you spend on the last solution? What are you expecting this to cost? Most buyers will tell you if you ask cleanly and without anxiety about the answer. The ones who will not tell you are usually either not the decision maker or not serious buyers. Either way you shouldn’t even be at the negotiating table.
Knowing their budget before you present your price gives you enormous leverage. If your price is below their budget you are leaving money on the table. If it is above, you know exactly how much gap you need to bridge before you present. Without that information you are guessing and guessing costs you money in both directions.
This also means if you know they don’t have budget, walk away early. Hold your price high. ‘We aren’t expensive, you just can’t afford it’. In many cases it is simply having the inner fortitude to ask ‘what is your budget?’ It’s not hard but most people crumble.
Price peg and put a number on the table.
As we covered in the negotiation blog, whoever puts a number on the table first is not losing. They are leading. A well-reasoned opening position, one that reflects genuine knowledge of the market and the value being delivered, creates the reference point for everything that follows. Stop being afraid to go first. Confidence in your price is the first signal the buyer reads about whether your price is justified. Ask them.
Don’t be scared, ask tough and uncomfortable questions like ‘We’re trying to sell you apples and our competitor is selling oranges, can you send me my competitors quote so I can do an apples-to-apples comparison analysis for you?’ Another tough question most hobby negotiators would not dare ask,
A hugely powerful statement in sales is ‘you can’t have it.’
Articulate the value and hold it high.
Your job in the Bank conversation is not to defend your price. It is to make the value so clear that the price defends itself. If a buyer is pushing back on price it almost always means they have not yet fully understood or felt the value. Defend your corner. Go back to that before you move the number. Articulate the problem being solved, the cost of not solving it, and what the outcome looks like when it is solved. Do that well and the price objection often disappears without you touching the number at all.
Hold your value high. Not out of stubbornness. Out of genuine belief in what you offer. The buyer who doesn’t believe the value themselves will discount on the first conversation. The buyer who pays full price is because the value was communicated clearly and confidently, with rigid belief, becomes your best long-term client.
A huge failure in discounting is your own damn pride. You not having faith in the value for money is you selfishly looking at and assuming incorrectly and predicting incorrectly their perception of your side. Stop looking at their side of the negotiation from your eyes.
Bank Is the Whole Game
Most salespeople treat the money conversation as the final hurdle. It is not. It is the conversation that the entire sales process has been building toward, and how you handle it depends entirely on how well you did everything that came before it.All the discovery, all the empathetic questions, all the personality profiling, all the customer research should be in your CRM and be answering their why.
If you identified the need clearly, raised it until the buyer felt the cost of inaction, understood what money means to this specific buyer and what their budget looks like, and can articulate your value without flinching, the Bank conversation is not a negotiation. It is a formality.
If any of those things were done poorly, the Bank conversation is where you find out.
Part four of the DEBUT series covers Entrusted. Trust is like Jenga, easy to build, all over with one bad move. Read it at www.outsold.com.au/blogs.
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